A steady rise in the oil price owing to the instability in the Middle East and the possibility of an escalation of the war, could see a slowdown in the decrease or worst an increase of the fuel price worldwide, also in South Africa.
The attack on oil installations in oil-producing countries and trade routes, could see the barrel price of Brent Cude Oil reaching $100 from the current high $70s a barrel.
CNN Business reports the invasion of the Ukraine by Russia two years ago saw the price shoot up to well over $130 a barrel. The current volatility in Middle East predicts nothing good for consumers when it comes to energy costs.
The USA is discussing whether it would support Israeli strikes on Iran's oil facilities in retaliation for Tehran's missile attack on Israel, President Joe Biden said this week, while Israel's military hit Beirut with new airstrikes in its battle against Lebanese armed group Hezbollah, Reuters reports.
Biden's comments contributed to a 5% rally in oil prices on Thursday, as Israel weighs its options after arch-foe Iran launched its largest-ever assault on Tuesday.
Meanwhile Layton Beard of the Automobile Association, tells Dealerfloor that the fuel price in South Africa is now more or less as low as during January 2023 with constant substantial decreases over the last couple of months.
He warned, however, that there were many factors to look at when the price of fuel is determined and that predictions were difficult because of this.
These factors include the Rand / Dollar exchange rate as we pay in US Dollars for the oil. The exchange rate is something that changes regularly. Another important factor is the international oil price that could be influenced by aspects like the current situation in the Middle East.
He says the pump price for fuel in South Africa is determined by the Central Energy Fund, which bases its calculations on these factors. This is done once a month using the average numbers for the previous monthly period.
At a certain stage during this reporting period, the data on these factors, such as the exchange rate and international oil price, can give an indication in which direction the price is heading, but it is not a certainty.
The rest of the fuel price includes government taxes that are R3.96/litre for petrol and R3.84 for diesel, which gives National Treasury a yearly income of R100 billion, one of the five top tax incomes for government. The Road Accident Fund levy on both petrol and diesel per litre brings the total to R6.14/litre.
Layton says the price of fuel is not just what it costs vehicle owners at the pump, but it forms a big part of the input cost for everything that is produced, transported and sold in the country, and all these factors have an effect on the value chain and eventually the basket of goods you buy.
Dunlop Tyres South Africa has completed a R1.7 billion investment programme at its uMnambithi (Ladysmith) manufacturing facility, introducing new manufacturing technology and expanding production capabilities at the plant.
Mahindra & Mahindra has unveiled the Scorpio Lifestyler, a midsize lifestyle bakkie derived from the Global Pik Up concept first shown in Cape Town in 2023.
The South African automotive industry has gained some breathing space following the latest move by the United States Senate to extend the African Growth and Opportunity Act, or AGOA, to the end of 2028.
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Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?
George Carlin
Dunlop Tyres South Africa has completed a R1.7 billion investment programme at its uMnambithi (Ladysmith) manufacturing facility, introducing new manufacturing technology and expanding production capabilities at the plant.
The South African automotive industry has gained some breathing space following the latest move by the United States Senate to extend the African Growth and Opportunity Act, or AGOA, to the end of 2028.
General Motors (GM) has renewed its joint venture with China's SAIC Motor Corp for another 20 years, enabling the United States (US) automaker to use China as an export hub amid rising competition from Chinese brands in and outside their home market.
